Netflix Lost Subscribers for The First Time in Several Years

On Tuesday, Netflix reported that it had lost over 200,000 subscribers, during Q1 this year. The last time Netflix lost this many subscribers was in October 2011, almost a decade ago. Consequently, Netflix shares plummeted by almost 25% in extended hours.

The streaming website warned that there may still be trouble ahead. Stocks of streaming websites Roku, Spotify, and Disney also cratered in the after-hours market after the update.

The company forecasted a plunge of 2 million global paid subscribers for Q2.

Addressing its shareholders, Netflix wrote:

Netflix was previously optimistic informing its shareholders that it expected the addition of 2.5 million net subscribers in Q1. While analysts claimed the number would be closer to 2.7 million. While in Q1 last year, Netflix added 3.98 million paid users.

Reed Hastings, Co-CEO reported that Netflix is now looking to explore “lower-priced, ad-supported user subscription formats” after years of running an ad-free platform. He added:

When we were growing fast it wasn’t a high priority, and now we’re working super hard on it. These are over a hundred million households that already are choosing to view Netflix; they love the service, and we’ve just got to get paid to some degree for them.

Netflix exclaimed that the shutting down of its services in Russia and canceling the subscription of its Russian paid members resulted in a loss of 700,000 subscribers. If that had not occurred, Netflix notes that it would have seen a net addition of 500,000 during the quarter.

The company also highlighted that the increasing competition from other streaming platforms, password sharing, and many other factors had also contributed to the loss in paid memberships.

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